An SEC report questioned the Colorado based company, inquiring about the possibility of undisclosed affiliates and shareholders unlawfully distributing securities.

As a result, shares of CANN are suspended until April 9, 2014.

In an email to Benzinga, CANN CFO Christopher Taylor said that "the management of the company [is] as shocked as anyone," further noting that "this does not pertain to any of the restricted shares owned by the founders or officers.

"This relates to stock that has been sold that is free trading, and we have no control over these sales."

See also: 14 Cannabis Stocks To Watch In 2014

420 Investor Alan Brochstein called CANN "one of the best companies in the [cannabis] space," noting that this is most likely a third-party problem with an individual investor breaking the rules.

Brochstein also pointed out that when other cannabis companies have had trade halted (AVNE, CDFT, and PTOG), the SEC provided incredibly vague reports regarding the suspensions, while the report for CANN has very specific language.

Full Circle Capital (NASDAQ: FULL), a business development firm that has significant investments in CANN, is trading down today on the news of the suspension.

FULL has paid CANN $500,000 in warrants, which is part of a $30 million dollar senior secured convertible note purchase agreement.

In addition to the CANN news, FULL paid a monthly dividend of .067 per share on March 14, and is trading ex dividend thursday.